Housing boom, is it over?
Jul 19th 2003, 8:06 am
#1
over the cuckoo's nest
Thread Starter
Joined: May 2003
Location: Gold Coast Qld.
Posts: 301
Housing boom, is it over?
Is there still steam in the housing market, or will it soon bust? I have been seeing lots of articles like this one recently.
The Courier Mail
Clouds darken the two-home dream
Madeline Healy
19jul03
THERE was a time when owning your home summed up the aspirations of most battling Aussies.
Throw in a patch of grass for those testy domestic cricket tournaments and perhaps a two-door garage.
But, no longer satisfied, Australians are dreaming bigger. For more and more people, a second or even third property is the latest trend – and we are borrowing billions to do it.
Despite Reserve Bank of Australia warnings about the overheated market, investors borrowed a record $6.3 billion to pump into property last month, an increase of 12 per cent.
While Reserve Bank figures show borrowing for owner-occupation is still the largest part of housing debt, the fastest-growing debt is for investor housing, which now represents 30 per cent of loans compared with 18 per cent a decade ago.
Factors driving investment include low interest rates, a lack of confidence in the share market and superannuation, concern about being priced out of the market and access to equity.
However, warnings are being voiced that the dream could end in a nightmare.
Housing Industry Association chief economist Simon Tennent said yesterday people were investing too much.
"You can put that down to the fact that the equity and superannuation markets are not looking attractive," Mr Tennent said.
"People are continuously under a barrage of house price comments about affordability decreasing and prices increasing and they panic."
The trend to buy an investment property has spread to a wide range of the population, with mums and dads trying to take control for their retirement years.
Australian Bureau of Statistics figures show the average Australian household carries a debt level of $88,375.
Servicing record debt levels which have more than doubled since 1996 takes about 20 per cent of disposable income compared with about 14 per cent 10 years ago.
Macquarie Property's research head Rod Cornish said owning an investment property had become a new social trend for those aged 45-55 years.
"They have paid off the family home and are now looking for investments," he said.
But Mr Cornish believed demand was dropping, partly because property prices were reaching unattainable heights.
"We certainly wouldn't want current levels of borrowing for investment to continue," he said.
Real Estate Institute of Queensland president Mark Brimble said low interest rates were the main factor behind high investor levels.
"Many Australians have lost faith in the stock markets and crave the security of the land, bricks and mortar."
He said there was still plenty of rental demand for properties in Brisbane – with most coming from younger people, especially students.
AMP Henderson chief economist Shane Oliver said people should think twice about investing in residential property.
"At the very least it is now high risk and likely to underperform other asset classes over the next few years," he said.
Meanwhile, the Federal Government wants to create a national framework to regulate property schemes, amid concerns that the boom has lured investors in to risky ventures.
Slater
The Courier Mail
Clouds darken the two-home dream
Madeline Healy
19jul03
THERE was a time when owning your home summed up the aspirations of most battling Aussies.
Throw in a patch of grass for those testy domestic cricket tournaments and perhaps a two-door garage.
But, no longer satisfied, Australians are dreaming bigger. For more and more people, a second or even third property is the latest trend – and we are borrowing billions to do it.
Despite Reserve Bank of Australia warnings about the overheated market, investors borrowed a record $6.3 billion to pump into property last month, an increase of 12 per cent.
While Reserve Bank figures show borrowing for owner-occupation is still the largest part of housing debt, the fastest-growing debt is for investor housing, which now represents 30 per cent of loans compared with 18 per cent a decade ago.
Factors driving investment include low interest rates, a lack of confidence in the share market and superannuation, concern about being priced out of the market and access to equity.
However, warnings are being voiced that the dream could end in a nightmare.
Housing Industry Association chief economist Simon Tennent said yesterday people were investing too much.
"You can put that down to the fact that the equity and superannuation markets are not looking attractive," Mr Tennent said.
"People are continuously under a barrage of house price comments about affordability decreasing and prices increasing and they panic."
The trend to buy an investment property has spread to a wide range of the population, with mums and dads trying to take control for their retirement years.
Australian Bureau of Statistics figures show the average Australian household carries a debt level of $88,375.
Servicing record debt levels which have more than doubled since 1996 takes about 20 per cent of disposable income compared with about 14 per cent 10 years ago.
Macquarie Property's research head Rod Cornish said owning an investment property had become a new social trend for those aged 45-55 years.
"They have paid off the family home and are now looking for investments," he said.
But Mr Cornish believed demand was dropping, partly because property prices were reaching unattainable heights.
"We certainly wouldn't want current levels of borrowing for investment to continue," he said.
Real Estate Institute of Queensland president Mark Brimble said low interest rates were the main factor behind high investor levels.
"Many Australians have lost faith in the stock markets and crave the security of the land, bricks and mortar."
He said there was still plenty of rental demand for properties in Brisbane – with most coming from younger people, especially students.
AMP Henderson chief economist Shane Oliver said people should think twice about investing in residential property.
"At the very least it is now high risk and likely to underperform other asset classes over the next few years," he said.
Meanwhile, the Federal Government wants to create a national framework to regulate property schemes, amid concerns that the boom has lured investors in to risky ventures.
Slater
Jul 19th 2003, 3:13 pm
#2
BE Forum Addict
Joined: Jun 2002
Location: Gold Coast- the best place in the world
Posts: 3,196
I hope it drops out there, it will mean lower prices for us!!
